Deck 27: Database Marketing

Question 1

The RFM score is obtained by ranking the customers on the basis of pricing patterns.

Answer 1

False

Question 2

An RFM score of ________ means that if this customer goes to the competitor,loss to the company will be minimal.

A) 321
B) 333
C) 555
D) 111

Answer 2

C

Question 3

Database marketing is the application of business intelligence systems to the planning and execution of marketing programs.

Answer 3

True

Question 4

In RFM analysis,an M score of ________ shows customers who have bought the least expensive item.

A) 2
B) 5
C) 1
D) 4

Question 5

Which of the following techniques uses a hierarchical arrangement of criteria to make predictions?

A) market-basket analysis
B) RFM technique
C) Cooke method
D) decision tree

Question 6

Which of the following is the first step in the process of producing an RFM score?

A) calculating income from most frequently bought items
B) calculating sales of the previous quarter
C) sorting customer purchase records by the date of most recent purchase
D) verifying customer IDs

Question 7

In market-basket terminology,a conditional probability estimate is referred to as ________.

A) support
B) cohesion
C) confidence
D) chance

Question 8

Which of the following RFM scores refer to the most valuable customer?

A) 111
B) 555
C) 123
D) 333

Question 9

If a customer has an RFM score of 113,which of the following actions should be implemented by the sales team?

A) should attempt to up-sell more expensive goods to this customer
B) should contact this customer immediately
C) should not waste any time on this customer
D) should set up an automated contact system for this customer

Question 10

In market-basket terminology,the ratio of confidence to the base probability of buying an item is called ________.

A) cohesion
B) support
C) confidence
D) lift

Question 11

What is the basic idea of the decision tree technique?

A) to analyze and rank customers according to their purchasing patterns
B) to select attributes that are most useful for classifying entities on some criterion
C) to determine annual sales patterns
D) to capture, store, analyze, and display geospatial data

Question 12

In market-basket terminology,________ is the term used to represent the probability that two items will be purchased together.

A) confidence
B) support
C) cohesion
D) assurance

Question 13

________ shows how much the base probability increases or decreases when other products are purchased.

A) Lift
B) Support
C) Confidence
D) Cohesion

Question 14

In RFM analysis,an F score of 1 shows that ________.

A) the customer has bought the least expensive item
B) the customer has frequently placed an order
C) the customer has always bought the most expensive item
D) the customer has rarely made a purchase

Question 15

In marketing transactions,the fact that customers who buy product X also buy product Y creates a(n)________ opportunity.

A) relationship selling
B) cross selling
C) value added selling
D) persuasive selling

Question 16

Data-mining techniques are essential for database marketing.

Question 17

Which of the following is a way of analyzing and ranking customers according to their purchasing patterns?

A) composite forecasts
B) RFM analysis
C) Cooke method
D) Delphi technique

Question 18

Which of the following marketing techniques refers to the application of business intelligence systems to the planning and execution of marketing programs?

A) ambush marketing
B) viral marketing
C) database marketing
D) guerrilla marketing

Question 19

Which of the following is a data mining technique for determining sales patterns?

A) RFM analysis
B) market basket analysis
C) composite analysis
D) Cooke analysis

Question 20

In RFM analysis,an R score of 5 shows that ________.

A) the customer has not made recent purchases
B) the customer has bought the most expensive item
C) the customer has frequently ordered costly items
D) the customer has purchased high end items lately

Question 21

What is database marketing?

Question 22

The frequency of customer purchases is not a determining factor for RFM score.

Question 23

The ratio of confidence to the base probability of buying an item is called support.

Question 24

Market-basket analysis is used to explore cross-selling opportunities.

Question 25

RFM scores can be used to concentrate the efforts of salespeople.

Question 26

The decision tree makes decisions based on If/Then decision rules.

Question 27

A common business application of decision trees is to classify loans by likelihood of default.

Question 28

Describe the process of conducting RFM analysis.

Question 29

RFM can be a useful tool to determine who your best customers are and who hasn't been in to the store in a while.

Question 30

Decision-tree analysis is a data-mining technique that requires a high degree of supervision.

Question 31

The RFM score of customers is obtained by multiplying their recency score,frequency score,and money score.

Question 32

A high F score denotes that the customer has bought an expensive item recently.

Question 33

In market-basket analysis terminology,confidence refers to the probability that two items will be bought together.

Question 34

What are decision trees? How do they classify people into groups?

Question 35

A shop finds that the M score of a customer is 1.This means that the customer has paid high dollar value to the shop.

Question 36

In market-basket terminology,what is lift ? How is it related to confidence?

Question 37

RFM analysis does not provide an understanding of the dollar value spent by a customer.

Question 38

A market-basket analysis shows that the support for products A and B is very high.This means that probability of buying B is very high if the customer has bought A.

Question 39

A customer obtains an RFM score of 555.This means that the customer is very important to the seller.

Question 40

What is a market-basket analysis?